Aussie Bitcoin miner scolded for pre-IPO marketing

Regulators have ordered Australia's Bitcoin Group to stop making public statements about its plans to undertake the world's first initial public offering of a virtual currency exchange after the company approached potential Chinese investors via social media.

Melbourne-based start-up Bitcoin Group in December said it hoped to raise $20 million on the Australian Stock Exchange, and had been seeking expressions of interest from potential investors from the Chinese community through Wechat, China's hugely popular instant messaging service.

The Australian Securities and Investments Commission (ASIC) on Friday said it was prohibiting Bitcoin Group from making any further statements about its planned listing until it had filed a prospectus.

While globally there are at least two other publicly traded bitcoin companies following "backdoor listings", Bitcoin Group would be the first to offer shares in an IPO.

"The publications were made before Bitcoin Group was registered as an Australian company by ASIC and before the lodgement of a formal disclosure document," ASIC said in a statement.

"ASIC expects companies to be fully aware of their obligations regarding advertising or publicity that occurs before making a regulated disclosure document available to investors."

Bitcoins are created through a "mining" process that uses a computer's resources to perform millions of calculations.

Advocates say bitcoin is revolutionary as it is not controlled by a central bank, but its rising popularity has stoked concern it can be used as a vehicle to launder money and finance militant groups.

Earlier this week, Hong Kong lawmakers urged authorities to ban bitcoin as a group of more than 25 people went to police headquarters to complain over dealings involving the digital currency that could have duped investors of up to $387 million.